JAL's operating profit seen diving 20% on labor costs
Weak oil prices, strong yen also a drag
TOKYO -- Japan Airlines is expected to post a 20% drop in operating profit to 170 billion yen ($1.55 billion) for the year ended in March, roughly in line with its guidance as rising labor costs for pilots and other personnel took a toll.
Sales likely fell 3% to 1.3 trillion yen. Low crude oil prices reduced income from fuel surcharges, and the yen's strength chipped away at income earned in foreign currencies. Revenue per passenger also shrank.
Intensifying price wars triggered a drop in per-passenger income on domestic flights. Per-flyer revenue growth for international flights arriving at Narita Airport was sluggish compared with those landing at Haneda Airport, which is closer to central Tokyo. But the air carrier likely surpassed its 1.28 trillion yen sales forecast, as both passengers and revenue per customer picked up toward the end of the fiscal year.
As for the year ending March 2018, the company will likely log a second straight operating profit decline. Depreciation charges will rise temporarily, due to a new customer management system that the airline will install to bolster efficiency. Airplane maintenance costs will also put pressure on the company's earnings.